South African retail sales recover

South African real retail sales recovered in March after pulling back in February. On a seasonally adjusted basis, March sales rose by 0.1% from February.

Statistics South Africa data showed that March real retail sales grew by 2.6% year-on-year. This followed a 1.6% year-on-year rise in February after a 4.4% year-on-year increase in January. Real seasonally adjusted retail sales hit a new record in January 2026. This followed a 3.7% gain in 2025 and a 2.5% increase in 2024.

Household consumption is the single largest category of economic activity. This means that 2026 economic growth had a good start to the year.

Analytical adjustments

As December retail sales are far more than January sales, Statistics South Africa adjusts the data. This is called seasonal adjustment. This removes the effects of normal seasonal variation. The effects of other influences are then recognised more clearly. One such effect could be the introduction of the “two pot” retirement scheme.

From 1 September 2024, South African retirement funds are split into a “savings” (one-third) and “retirement” (two-thirds) pot. Many people accessed their savings pot. This boosted retail sales in 2025.
The other adjustment made is to remove the effect of inflation. Retail inflation is not the same as consumer inflation. This is because they measure different baskets.

Economists make a further adjustment. They take the real seasonally adjusted data and then index the data to a starting point. This is normally started at an index value of 100. This means it is easy to get a percentage increase. Consequently, the January 2026 value is 10.2% higher than the January 2024 level.

Negative March 2026 annual change

There was only out of the seven categories that had an annual drop in March.

That was food, beverages and tobacco in specialised stores had a 5.6% year-on-year drop. This followed a sequence of three months when the year ago decline exceeded 5%. Illicit sales of alcohol and cigarettes are taking away sales from legitimate retailers.

The illicit economy, or shadow economy, comprises illegal transactions, counterfeit goods, and, as of 2026, roughly 10% of South Africa’s GDP.

Organised crime syndicates control this sector. It includes smuggling, drug trafficking, and illegal mining.
The tobacco sector provides a cautionary tale as to the impact. Once a robust industry supporting tens of thousands of jobs, it has been devastated by illicit trade.

Currently, about three out of every four cigarettes sold in South Africa are illegal. These do not pay tax. The government between R18 billion and R28 billion a year in tobacco taxes. Legitimate manufacturers cannot compete with packs selling at less than R20. This is below the minimum collectible tax of R26.22 per pack. Thousands of farm and factory workers have lost their livelihoods.

The liquor industry reports that illicit alcohol now makes up close to a fifth of consumption, costing the government more than R16 billion annually and exposing consumers to unsafe products.

Positive March 2026 annual change

The South African retail sales recovery in March was driven by the other six sectors. These all had positive annual changes in March. If the food and beverage sector is excluded, then there was a 3.1% year-on-year increase.

The sector with the largest annual rise was household furniture, appliances and equipment. It had a 11.3% year-on-year increase in March. This sector has been growing at more than 8% year-on-year for the past seven months.